Big Data, Small Competition?
In the Information Age, the widespread use of data analytics has valuable potential in the field of competition law enforcement. Antitrust agencies may be able to resort to ‘machine-lawyering’ practices, and rely on such analyses to identify anticompetitive conduct. The information collected could further constitute a valuable tool for companies wishing to stay clear of antitrust violations, since it may be employed to design corporate policies enhancing compliance. However, concerns have been raised about the potential use of data to restrict, rather than enhance, competition. The discussion is particularly intense in the context of the possession of Big Data, widely regarded as ‘the oil of the digital era’. A recent joint report by the German and French competition authorities refers to three possible issues for competition: (1) the creation of a barrier to entry into the market for those who do not have access to the data; (2) the proneness of collusion resulting from increased market transparency; and (3) the facilitation of exclusionary abuses of market power if the company in possession of the data prevents its rivals from accessing the relevant information. Stucke and Grunes have also pointed towards the ‘potential harm of data-driven mergers’, such as the acquisition of LinkedIn by Microsoft or the purchase of WhatsApp by Facebook (both of which were cleared by the relevant competition watchdogs).
While the prospect of Big Data being misused in ways that could prove detrimental to the competitive process is certainly worrying, the fact remains that the progress to date has mainly been a case of all bark and no bite. Despite the intense academic debate generated by these concerns, and the publication of studies by various antitrust enforcers, only the German Bundeskartellamt has actually opened proceedings against a company—Facebook—for a suspected abuse of market power linked to an infringement of data protection rules. The authorities’ efforts do not yet appear to have unearthed any other specific problems worth investigating and, as EU Competition Commissioner Margrethe Vestager has acknowledged, agencies ‘shouldn’t take action just because a company holds a lot of data. After all, data doesn’t automatically equal power.’ Even if that was the case, the possession of market power is not punishable in and of itself—what is forbidden is the abuse of that power.
With the rapid, unrelenting growth of data-driven business strategies it is highly likely (if not certain) that antitrust authorities all over the world will soon have to tackle these issues head-on, and they will be required to do so relying on ‘an objective case-by-case, fact-based assessment’. Competition law can help ‘distil’ the benefits of the data economy by identifying and targeting some of its negative consequences. Yet in practice this is a challenging task. Not only must the application of competition law be intertwined with that of privacy and data protection legislation; enforcers also have to take into account a new reality which challenges the effectiveness of the traditional antitrust remedies and analytical tools. In this sense, one wonders whether the limited actions taken to date are a consequence of the absence of specific problems, or of the insufficiency of the conventional instruments to identify those problems.
Sandra Marco Colino, Hong Kong